EPA proposes to amend the New Source Performance Standards (NSPS) for residential wood heaters and expand them to include types of wood-burning appliances not covered by the existing standards, which were set in 1988. According to the preamble to the proposed rule, the updated emission limits would reflect the current best systems of emission reduction (BSER), eliminate exemptions for several residential wood combustion devices, strengthen test methods, and streamline the certification process.
Pursuant to Section 111 of the Clean Air Act, EPA must establish federal standards of performance for new sources which, in the judgment of the Administrator, “cause, or contribute significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.” The standards should “reflect the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”
EPA projects that the new standards would significantly reduce emissions of fine particulate matter (PM2.5), as well as carbon monoxide (CO), volatile organic compounds (VOC), and hazardous air pollutants (HAP), and “result in substantial reductions in exposure and improved public health.”3 By assigning dollar values to modeled reductions in PM2.5 emissions between 2014 and 2022, EPA estimates benefits over that period ranging from $1.7 billion to $4.1 billion (2010 dollars).4 EPA was not able to monetize the value of reductions in emissions of the other pollutants, “reduced climate effects due to reduced black carbon emissions; reduced ecosystem effects; [or] reduced visibility impairments,” nor did it monetize benefits for one category of covered appliances – masonry heaters. EPA estimates compliance costs, annualized over the 2014 – 2022 period, of $15.7 million per year.
EPA’s analysis suggests that the benefits of the proposal, once implemented, would outweigh the costs by a factor of more than 100. These estimates depend on numerous questionable assumptions, however, and the regulatory impact analysis developed to support the proposal is flawed in important ways.
This comment reviews these flaws, suggests ways to improve EPA’s ex ante analysis, and also recommends steps EPA should commit to now so that it can evaluate whether the rule achieves the projected outcomes once implemented.